Quarterly Financial Report ending June 30, 2018

Statement Outlining Results, Risks and Significant Changes in Operations, Personnel and Program

1. Introduction

1.1 Background to the Quarterly Financial Report

As per GC 4400, Departmental Quarterly Report, the Office of the Communications Security Establishment Commissioner (Office) is submitting its quarterly report.

This section of the quarterly financial report should be read in conjunction with the Main Estimates (and as applicable - Supplementary Estimates and previous interim reports for the current year).  The report has been prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board.  This quarterly financial report has not been subject to external audit or review.

1.2 Authority, Mandate and Program

The position of Communications Security Establishment Commissioner was created to review the activities of Communications Security Establishment to determine whether it performs its duties and functions in accordance with the laws of Canada.  This includes having due regard for the privacy of Canadians.

The Commissioner derives his authority and mandate from the National Defence Act:

• reviewing the activities of the Communications Security Establishment to ensure they comply with the law;
• conducting any investigations deemed necessary in response to complaints about the Communications Security Establishment;
• reviewing and reporting annually to the Minister on review activities carried out under an (ministerial) authorization;
• informing the Minister of National Defence and the Attorney General of Canada of any Communications Security Establishment activities that may not be in compliance with the law; and
• submitting to the Minister for tabling in Parliament, within 90 days after the end of each fiscal year, an annual report on the Commissioner's activities and findings.

In addition the Commissioner also has a mandate under the Security of Information Act to receive information from persons who are permanently bound to secrecy seeking to release special operational information on the grounds that it is in the public interest.

Further information on the mandate, roles, responsibilities and programs of the Office can be found in the Office's 2018–19 Departmental Plan and in the Main Estimates.

1.3 Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting.  The accompanying Statement of Authorities includes the Office's spending authorities granted by Parliament and those used by the Office consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2018–2019 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework, designed to meet financial information needs with respect to the use of spending authorities.

The authority of Parliament is required before moneys can be spent by the Government.  Approvals are given in the form of annually approved limits through appropriation acts or through legislation in the form of statutory spending authority for specific purposes.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund.  A special warrant is deemed to be an appropriation for the fiscal year in which it is issued. 

The Office uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process.  However, the spending authorities voted by Parliament remain on an expenditure basis.

2. Highlights of fiscal quarter and fiscal year to date (YTD) results

First Quarter/ Year to Date

As reflected in the Statement of Authorities and the Departmental budgetary expenditures by Standard Object (below), the Office's first quarter/year to date spending in 2018–2019 is up $8 thousand from the same quarter/year to date of the previous year. 

This change can be attributed to the following factors:

• an increase of $5 thousand for salaries and benefits was due primarily to the increase in salaries resulting from collective agreements signed offset by a minor decrease in salaries resulting from employee turnover;
• transportation costs increased $5 thousand as a result of meetings with senior review officials in London, England;
• the early payment of the annual charge for a software license and a slight increase in supplies accounted for an increase of $4 thousand dollars; and
• information costs have decreased by $6 thousand as costs of a research paper ($10 thousand) incurred in the first quarter of 2017­–2018 were not repeated in the first quarter of 2018–2019. However, there were increased costs related to the annual report ($1 thousand) and the acquisition of access to an additional database ($3 thousand).

3. Risks and Uncertainties

Bill C-59

On June 20, 2017, Bill C-59, An Act respecting national security matters, was given first reading in the House of Commons. Under the proposed legislation, when the legislation comes into force, the Commissioner of the Communications Security Establishment becomes the Intelligence Commissioner, the Office of the Communications Security Establishment Commissioner becomes the Office of the Intelligence Commissioner, the employees of the Office of the Communications Security Establishment Commissioner become employees of the Office of the Intelligence Commissioner and the money remaining from the appropriation to the Office of the Communications Security Establishment Commissioner is deemed to be an amount appropriated to the Office of the Intelligence Commissioner. 

With no certainty as to when the legislation will come into force, currently in the second reading stage in the Senate, the Office continues to conduct reviews and support the Commissioner in the discharge of his mandate.

4. Significant changes in relation to operations, personnel and programs

There are no significant changes in relation to operations, personnel and programs.

5. Approval by Senior Officials

Original signed by:

The Honourable Jean-Pierre Plouffe, CD
Commissioner                                                           

Gérard Normand
A/Chief Financial Officer

Ottawa, Canada
August 27, 2018

Statement of Authorities (unaudited)

Fiscal year 2018–19 (in thousands of dollars)

	Total available for use for the year ending March 31, 2019	Used during the quarter ended June 30, 2018	Year to date used at quarter-end
Vote 1 - Program Expenses	1,955	344	344
Statutory authorities – Contributions to employee benefit plans	166	42	42
Total Budgetary authorities	2,121	386	386
Total authorities	2,121	386	386

Fiscal year 2017–18 (in thousands of dollars)

	Total available for use for the year ended March 31, 2018	Used during the quarter ended June 30, 2017	Year to date used at quarter-end
Vote 1 - Program Expenses	1,940	336	336
Statutory authorities – Contributions to employee benefit plans	169	42	42
Total Budgetary authorities	2,109	378	378
Total authorities	2,109	378	378

Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2018–19 (In thousands of dollars)

Expenditures:	Planned expenditures for the year ending March 31, 2019	Expended during the quarter ended June 30, 2018	Year to date used at quarter-end
Personnel	1,326	304	304
Transportation and communications	90	13	13
Information	25	13	13
Professional and special services	311	50	50
Rentals	320	0	0
Repair and maintenance	2	0	0
Utilities, materials and supplies	27	6	6
Acquisition of land, buildings and works	0	0	0
Acquisition of machinery and equipment	20	0	0
Other subsidies and payments	0	0	0
Total gross budgetary expenditures	2,121	386	386
Total net budgetary expenditures	2,121	386	386

Fiscal year 2017–18 (In thousands of dollars)

Expenditures:	Planned expenditures for the year ending March 31, 2018	Expended during the quarter ended June 30, 2017	Year to date used at quarter-end
Personnel	1,246	299	299
Transportation and communications	31	8	8
Information	65	19	19
Professional and special services	392	50	50
Rentals	318	0	0
Repair and maintenance	3	0	0
Utilities, materials and supplies	29	2	2
Acquisition of land, buildings and works	0	0	0
Acquisition of machinery and equipment	25	0	0
Other subsidies and payments	0	0	0
Total gross budgetary expenditures	2,109	378	378
Total net budgetary expenditures	2,109	378	378